The Indian Hotels Company Limited (IHCL) has announced its approval for the amalgamation of Oriental Hotels Limited (OHL) into IHCL. This strategic merger, approved by the boards of both companies, is set to create a more streamlined hospitality giant. The transaction, structured as an all-stock deal with a share exchange ratio of 25 IHCL shares for every 117 OHL shares, is anticipated to be completed by the second half of FY2028, with an Appointed Date of April 1, 2027.
IHCL and Oriental Hotels Announce Merger Agreement
The Indian Hotels Company Limited (IHCL), India’s leading hospitality firm, has officially announced its intention to merge with Oriental Hotels Limited (OHL). This significant development, approved by the respective boards of directors, will see OHL amalgamated into IHCL through a Scheme of Arrangement. The merger is subject to the necessary statutory approvals and clearances.
Strategic Rationale and Shareholder Value
According to Mr. Puneet Chhatwal, Managing Director & Chief Executive Officer of IHCL, the merger aligns with the ‘Accelerate 2030’ strategy, aiming to create value, simplify the group’s structure, and unlock the full potential of OHL’s portfolio. Key assets from OHL, including Taj Coromandel, Chennai, Taj Fisherman’s Cove Resort & Spa, Chennai, and Taj Malabar Resort & Spa, Cochin, will be integrated. Mr. Chhatwal highlighted that the merger is expected to drive long-term value by leveraging IHCL’s robust balance sheet for strategic investments, inventory expansion, and product enhancements, thereby strengthening the premium positioning of the combined entity.
Mr. Pramod Ranjan, Managing Director & CEO of Oriental Hotels Ltd., expressed optimism that the merger will create significant value for OHL shareholders, allowing them to participate directly in IHCL’s growth trajectory. He noted IHCL’s proven track record of sustained performance and growth.
Transaction Details and Share Exchange
The Scheme of Arrangement outlines an all-stock transaction with a defined share exchange ratio: 25 shares of IHCL for every 117 shares of OHL. The completion of this merger is targeted for the second half of the financial year 2028, with an Appointed Date set for April 1, 2027. Mr. Ankur Dalwani, Executive Vice President & Chief Financial Officer at IHCL, stated that the merger will further simplify the group’s holding structure, increasing IHCL’s direct ownership and creating two new operating subsidiaries. This is expected to streamline governance, reduce overheads, and enhance operational efficiency.
Portfolio and Transaction Advisors
Oriental Hotels Limited currently operates a portfolio of seven hotels with a total of 825 rooms. This includes freehold assets such as Taj Coromandel, Taj Fisherman’s Cove Resort & Spa, and Gateway Coonoor, along with long-leasehold assets including Taj Malabar Resort & Spa, Vivanta Coimbatore, Vivanta Mangalore, and Gateway Madurai. OHL also holds strategic investments in various IHCL group companies both domestically and internationally.
For IHCL, PwC Business Consulting Services LLP served as the Registered Valuer, and Kotak Mahindra Capital Company Limited provided the Fairness Opinion. Legal counsel was provided by Cyril Amarchand Mangaldas. On behalf of OHL, SSPA & Co. acted as the Registered Valuer, with Motilal Oswal Investment Advisors Limited providing the Fairness Opinion, and Kochhar & Co. serving as legal counsel.
About The Indian Hotels Company Limited
Founded by Jamsetji Tata in 1903, The Indian Hotels Company Limited (IHCL) is India’s largest hospitality company by market capitalization. It operates a diverse portfolio of brands including Taj, SeleQtions, Gateway, Vivanta, Ginger, Atmantan, Brij, and Tree of Life, among others. IHCL boasts a global presence with 650 hotels, including 268 in the pipeline, across 4 continents and 15 countries.
Source: BSE
